Ethics of stock option backdating
The Irell interviews with Ruehle were turned over to the government as part of its efforts on behalf of the company to cooperate with authorities and not get the company prosecuted.
Unfortunately, the statements given by Ruehle to the Irell attorneys were used by the government to secure an indictment against Ruehle.
Ruehle asserted that the attorney-client privilege protected his conversations with Irell from disclosures to third parties without his consent.
The Broadcom case involved charges against three former executives.
In addition to Ruehle, the government indicted the company’s former chairman, Henry Samueli, and the former chief executive, Henry Nicholas. about the backdating, while Nicholas and Ruehle chose to fight the charges. His attorneys wanted to call two former executives as witnesses for the defense: Samueli and Broadcom’s former general counsel, David Dull.
Ruehle argued that he had an expectation of confidentiality, contended he did not understand at the time of the interview with Irell that the information he provided to them could be disclosed to third parties, and maintained that he believed his statements to the Irell attorneys were protected because the attorneys were working for his employer.
The government argued that Ruehle was told by the Irell attorneys that they represented the company and not him, and that the company held the privilege as to statements he made to Irell, and the company, alone, could decide to waive the privilege and turn the statements over to the government (the warnings that the government claimed the attorneys gave Ruehle are the so-called corporate Miranda warnings mandated under a United States Supreme Court case called ).